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Hill v. G E Power Systems, Inc.

A suit against a nonsignatory that is based upon the same operative facts and is inherently inseparable from the claims against a signatory will always contain issues referable to arbitration under an agreement in writing, and thus will satisfy the requirements of Federal Arbitration Act '16(a)(1).

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Appeal from the United States District Court For the Southern District of Texas

Canatxx Energy Ventures filed this suit against General Electric Power Systems, Inc. (GEPSI). Facing a demand for arbitration, Canatxx added General Electric Capital Corporation (GECC) as a defendant, with which it has no arbitration agreement. The amended complaint asserted intertwined claims against both defendants arising out of a complex financial venture. GECC appeals the refusal both to stay the suit against it pending Canatxx’s arbitration with General Electric Power Systems and to order Canatxx’s suit against it to arbitration. We reverse the district court’s refusal to stay the suit against GECC pending Canatxx’s arbitration with GEPSI, but affirm its refusal to compel Canatxx to arbitrate its claims against GECC.

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